Pressure mounts on Paraguay’s Central Bank over doubts about some lenders’ solvency

The Association of Banks of Paraguay has requested the Central Bank of Paraguay to investigate the solvency of institutions that received financial support during merger processes. This comes after senators from both the ruling party and the opposition called on President Santiago Peña to remove the leadership of the institution. The association emphasized that the financial health of lenders should not be based on "differential treatment."

The Central Bank had previously reported to the Senate on the behavior of several private lenders, including Ueno Bank, which has reportedly attracted significant public deposits in recent years. The association called the report "incomplete" and expressed ongoing concerns over the credit exposure of an unidentified private bank to companies within its own group.

On Wednesday, senators from various parties urged Peña to dismiss the Central Bank's board, specifically its president, Carlos Carvallo. President Peña had publicly supported the institution and called for calm amid rumors about Ueno Bank. However, neither the Central Bank nor Ueno Bank have commented on the association's statement.

In 2024, President Peña dismissed reports of the Social Security Institute purchasing 250 billion guaraníes in Ueno Bank bonds, describing them as a "media campaign" and "lies." The bank's head, Juan Manuel Gustale, stated at the time that Peña was a shareholder in Ueno Holding and not in the bank. Peña himself claimed he had sold those shares in April 2025.